Sanctions-hit Russia has had its 2024 Opec+ production quota revised up, following the conclusion of consultations with the seven Opec secondary sources about its output in the first quarter of this year.
The new target is 9.949mn b/d, up from the 9.828mn b/d that was issued to Russia at the conclusion of this month's Opec+ meeting, when some countries' baselines were adjusted. The original quota was described as Russia's production figure in February as assessed by the seven Opec secondary sources, of which Argus is one. The February figure was used as it is the level from where Russia pledged to implement a 500,000 b/d voluntary cut from March ꟷ a decision Moscow attributed to the G7-led price cap on Russian exports that had been in place since December.
Opec at the time said the Russia figure was "subject to revision… as the country is currently working with the secondary sources to update production figures."
Moscow began its outreach to the secondary sources in May, to discuss their estimates of production since February, shortly before the Kremlin said it would stop publishing data on crude, natural gas and condensate. Russia felt the secondary sources had been overestimating its output in the months since February, and in turn, not been capturing the full extent of its efforts to deliver on its 500,000 b/d reduction. As part of the outreach, the Russian energy ministry restarted publishing some data.
"Based on the latest figures provided by the secondary sources, Russia's crude oil production in February 2023 has now been revised to stand at 9.949mn b/d, and this will be considered the updated required production for Russia for January 2024 to December 2024," the Opec secretariat said. But this does not factor in Moscow's voluntary cut, which it has said it will implement until the end of 2024. So this implies a cap on Russian production of 9.449mn b/d for the remainder of this year and throughout 2024.
The Opec secretariat this week said secondary sources had collectively assessed Russian production at 9.533mn b/d in May, implying a cut of 416,000 b/d from February. Argus estimated Russian crude output at 9.56mn b/d in May, down from 9.9mn b/d in February, implying a cut of 340,000 b/d.
Russian deputy prime minister Alexander Novak said in late April that the country's crude and condensate production is expected to fall by almost 4pc to 515mn t (10.3mn b/d) this year. Opec+ output quotas are for crude only. Condensate typically accounts for 7-8pc of overall Russian liquids production.
